The State Bank of Pakistan (SBP) has taken a pivotal step to accelerate and digitize the flow of home remittances. In a landmark decision, the central bank has formally allowed authorized Foreign Exchange Companies (FECs) to integrate directly with Raast, Pakistan’s flagship instant payment system.
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This strategic integration aims to channel a greater volume of remittances through formal, traceable, and efficient digital pathways, boosting the country’s foreign exchange reserves.
Key Directive & Immediate Impact:
In a circular issued to all FECs, the SBP has granted permission for their participation in Raast. The directive mandates exchange companies to establish seamless digital links with their partner banks that are already live on the Raast platform. This move will empower overseas Pakistanis to send money home via exchange companies with the same speed, convenience, and low cost associated with Raast’s bank-to-bank transfers.
Strategic Benefits for the Economy:
This initiative is designed to achieve multiple critical objectives:
- Faster & Cheaper Transfers: Drastically reduce the time and cost for beneficiaries to receive funds from abroad.
- Increase Formal Remittances: Incentivize the use of formal channels by offering a superior digital experience, potentially capturing a larger share of total remittances.
- Enhanced Transparency & Security: Ensure all transactions are digitally recorded, improving transparency and security within the financial system.
- Financial Inclusion: Encourage remittance recipients, who may be unbanked, to utilize digital accounts linked to Raast, bringing them into the formal financial net.
The SBP has instructed exchange companies to complete the necessary integration processes promptly and to widely communicate this new service to their customers, both senders and receivers.
